Q: Do you think we are in a recession or just a slowdown, and how are you preparing the credit union?

A: There is no question that there is some kind of slowdown. Whether it is a recession, economists can argue about that. There is certainly an effect on the financial markets and liquidity. The slowdown means less credit is available out there, and people are coming here. We have seen a flight to quality on the loan side, and we have plenty of liquidity.

We know small businesses are struggling to find loans at a reasonable rate, so we have increased our small-business lending. We have tripled our volume from the year before.

Selling loans is not that profitable for us. We don’t have enough volume. Where we make the money is holding the loan and booking the interest.

Q: Are you seeing any signs that financial pressures on your members are increasing?

A: Delinquencies did increase in the fourth quarter and losses are up on consumer loans. What we know is that the losses that are coming in are with people who were risky to begin with.

From 2001 to 2005, the telecom layoffs really hit Bellco hard with a lot of our members being unemployed. They found jobs even if they weren’t making what they made (before).

We are constantly making an effort to make credit available to people who don’t have perfect credit. We offer credit that other institutions won’t offer at rates they won’t offer. We work with our members.

Q: People are being urged to spend their tax rebate checks, but Bellco is advising members to save the money or pay down debt. Why buck the trend?

A: If you look at what true consumer advocates are saying, it is that Americans have too much debt. They have borrowed too much against their homes. They have borrowed too much on credit cards. They really need to show much more fiscal prudence.

Q: Any lessons from the unraveling of Norlarco, the Fort Collins credit union that was backing home-construction loans in Florida?

A: Clearly the first lesson is stick to what you do best. What we do best is serving our members in Colorado. Credit unions that have stuck to Colorado, to their roots, stuck to their memberships and invested locally are all doing well.

The credit unions in trouble all made the same mistake. They invested in out-of-state real estate where they didn’t know who the borrowers were or what their economic situations were. They invested in loans that were sold to them by a third-party broker.

Q: What kind of response are you seeing to Bellco’s decision to provide non-customers free access to your automated teller machines?

A: We have seen about a thousand more transactions per week from nonmembers. They are learning about us and having a positive experience. It may not lead to an immediate opening of an account, but over time it will lead to more business.

People don’t want to pay ATM fees. When we were charging fees, every single month there were fewer transactions from nonmembers than the previous month, even though Wells Fargo was charging $2.50 and we were charging $1. The fees weren’t generating enough money to bother people with.

Q: What are your plans for Bellco this year?

A: We want to grow. It is more profitable to bring in our own customers and serve them well and keep relationships for a long period of time. We are adding branches, two this year and more next year.

The problem for a community credit union is getting the word out. Bellco is still associated with the phone company. We have a 72-year- old brand, and we don’t want to get rid of the name. We do need to get the word out that people can come to Bellco.

Edited for length and clarity from an interview by staff writer Aldo Svaldi

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